Taisuger chief pledges quick turnaround

State-run Taiwan Sugar Corp's (Taisugar, 台糖) chairman-designate Wu Nai-jen (吳乃仁) yesterday vowed the loss-making company would turn a profit after he takes office on April 8th.

"Taisugar lost over NT$2 billion last year. Were there not revenues of NT$3.9 billion from selling real estate, there would have been a deficit of some NT$6 billion," Wu said yesterday at the DPP's central headquarters while confirming his resignation as the ruling party's secretary-general.

Facing an uphill battle, Wu added that he would do his best to thoroughly review the company's finances and brainstorm new managerial concepts to improve its profitability.

Taisugar President Tung Ruey-pin (董瑞斌) yesterday further expanded on the company's financial difficulties, saying "the net deficit figure was actually up to NT$3.8 billion last year." He was speaking at a breakfast meeting with opposition lawmakers yesterday morning at the legislature.

At the meeting, KMT legislator Huang The-fu (黃德福) from the self-appointed "corruption-busting task force (揭弊抓鬼小組)," said that Taisugar relies too heavily on selling state-owned land to balance its asset statements.

Citing the fact that many of the company's investment decisions are mandated by the cenral government, Tung added that 90 percent of Taisugar's land was sold to comply with government construction projects.

"Only 5 or 6 percent of our land sales were initiated by Taisugar," Tung said.

While blaming the government's sugar-industry policy as the main culprit behind the company's losses, Tung also said that Taisugar is closing down six local plants this year and planning to build sugar-making plants in Vietnam or Australia to reduce costs and improve its efficiency to compete with post-WTO foreign sugar imports.

The task force, moreover, yesterday probed the firms' injection of capital into several investment projects, which opposition lawmakers said were based not on economics but "political correctness."

They questioned whether profits would be generated from Taisugar's NT$5 billion re-investment in the Taiwan High Speed Rail Corp (THSRC, 高鐵), NT$1.5 billion in the Sun Ba Power Corp (森霸電力), NT$600 million in the Yue-Mei International Development Corp (月眉國際開發) and NT$280 million in the Taiwan Development & Trust Corp (台開).

Independent lawmaker Sisy Chen (陳文茜) argued that these companies are all either financially troubled or highly risky as investments and she said she suspected that Taisugar's investment decisions are made more due to developers' close ties with the Presidential Office than they were with potential profits.

Singling out THSRC, which is a build-operate-transfer (BOT) project, Chen said that "in fact, the government should not have granted any funds to the project, let alone funds from loss-making Taisugar."

In response, the banker-turned-Taisugar president Tung, who took office last Wednesday, said that Taisugar's investments have all undergone feasibility studies and that the investment in the THSRC was finalized in 1990.

He offered his own assessment, however, saying that the railway investment -- either by granting funds or selling land -- should offer a reasonable return, since Taisugar-owned land adjacent to the train stations that will be valuable in future development projects.

The task force, nevertheless, yesterday decided to shelve Taisugar's budget review until the company's financial difficulties improve.